Down Payment – How Much Do You Need?

By
Real Estate Agent with Realty ONE Group Mountain Desert

Gone are the days when anyone could buy a home with just a promise and signature. No documentation loans allowed virtually anyone to buy a house with no money down with just a simple credit check. After the mortgage meltdown, this all changed. Lenders tightened guidelines and down payments were back.

But how much do you actually need? Must you always find 20% down? The answer might surprise you; there are many ways to buy a home with less than 20% down payment.

  •   0% Down There are still two loan programs which allow one to buy a home for no down payment; the VA loan and the USDA loan. The VA loan requires the borrower to be a qualified service person or veteran and the USDA loan is for certain areas under the Department of Agriculture.

  •   5% Down Conventional loans with loan limits can allow one to buy a home with as little as 5% down. These loans do have PMI (Private mortgage insurance) which can be eliminated when the loan amount falls below the 20% threshold.

  •   3 1⁄2 % Down FHA offers first time home buyers a good home loan for only 3.5% down payment. Again these loans have loan limits and PMI but offer a faster entry into the housing market.

    Buying a home doesnt always mean 20% loan. If youre considering buying a new home, talk to your lender about your options. 

Comments (2)

Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It's always good to have a good money plan just like this one! Love and light and all the best

Jul 22, 2021 09:51 PM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Kat. So many ways to get a loan with less than 20% down. The key is qualifying for a program. Enjoy your day.

Jul 23, 2021 05:12 AM